FEMA’s increased flood insurance rates could affect Texans

Federal flood insurance rates could increase for thousands of homeowners due to legislation passed last year, but a recent Senate bill could delay the hike in premiums.

On Tuesday, Louisiana Sen. Mary Landrieu announced that her bill to protect against an increase in flood insurance rates will go on to the Appropriations Committee for consideration.

The legislation would provide relief to homeowners who built in low-lying areas before the updated flood maps and it would delay the increase in insurance premiums.

Landrieu released the following statement regarding her bill that would prevent FEMA from increasing rate:

“These home and business owners played by the rules, purchased properties that were up to code and are now facing exorbitant rate hikes – my legislation will prevent FEMA from raising these rates. Biggert-Waters makes the NFIP self-sustainable, but it does it on the backs of people who live and work along the coast. As I’ve said for some time, flood insurance must be affordable, accessible and self-sustainable – one without the others will not work for the people of Louisiana. Today’s legislation is an important step towards that goal and I will continue to work to pass my SMART NFIP Act to provide a more comprehensive solution to this problem.”

Louisiana is not the only state that could be affected by the increased rates. The National Flood Insurance Program (NFIP) protects states across the nation.

NFIP subsidized policies cover between 25,000 and 100,000 individuals in Texas and Louisiana. (The government reports only a range, not specific numbers.)

In Texas, Harris County has the largest number of subsidized policies, ranging from 10,001 to 30,000. Galveston County has the next highest amount of NFIP Flood Insurance policies with 5,001 to 10,000 policies.

Congress enacted the NFIP in 1968 to compensate for the fact that most homeowners’ insurance policies did not cover flooding.

In 2012, the Biggert Waters Flood Insurance Reform Act was passed in order to make the program more sustainable, but Landrieu is now fighting for the rate increases to be delayed.

“Grandfathered” rates will end in 2014 for those in communities that adopt a new, updated Flood Insurance Rate Map. Rates would increase each year by 20 percent over a time period of five years.

Under the Biggert Waters Flood Insurance Reform Act, only 5 percent of NFIP policies would see immediate 25 percent increases in their premiums. Non-primary residences, businesses, and severe repetitive loss properties would be subject to these changes.

About 81 percent of policy holders would not be affected by Section 205 of the Biggert Waters Act. Properties that were constructed before a community adopted its first Flood Insurance Rate Map would retain their subsidies until the property is sold to a new owner.

The remaining 4 percent of policy holders, including condos and multifamily properties bought before the Flood Insurance Rate Map, would not see immediate increases in their premiums.

Landrieu’s bill also includes $10 million over President Obama’s budget to “modernize flood maps to ensure they fully reflect local investments in flood protection infrastructure.”